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Cambridge Finance Workshop - Hector Calvo-Pardo

Cambridge Finance Workshop Series are usually held on Thursdays during term time. The workshops are an opportunity for those working in finance to present their latest results or papers.
When Jan 25, 2018
from 01:00 PM to 02:00 PM
Where Room W4.03, Cambridge Judge Business School
Contact Name
Contact Phone 01223768129
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Dr Héctor Calvo Pardo is Reader in Economics within Social Sciences at the University of Southampton.

Dr Héctor Calvo Pardo's photo


by Luc Arrondel (PSE), Hector Calvo-Pardo (U. of Southampton), Chryssi Giannitsarou (U. of Cambridge) and Michael Haliassos (Goethe U. Frankfurt)


Abstract. We design, field and exploit novel survey data, from a representative sample of the French population in December 2014 and May 2015 to provide insights regarding social interactions and whether they are informative for financial decisions, or they encourage imitation, mindful or mindless. We provide a model where purely informative social interactions influence subjective expectations of future stock market returns and demand for investing in stocks, and find strong support for the presence of informative social interactions. The extent to which the respondent’s financial circle is informed about or participates in stockholding appears to influence perceptions of recent stock returns and, only through them, expectations of future returns. Controlling for subjective expectations, stock market participation and the conditional portfolio share are positively influenced by the extent to which the financial circle is informed about or participating in the stock market. Alongside informative social interactions with the respondent’s financial circle, we also find some evidence of mindless imitation of stock market participation observed in the outer social circle. These findings suggest that informative social interactions are significant and create a social multiplier for financial education and information, even though the potential for mindless imitation is also present.


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